Tempe Developers Provided Exclusively Luxury Apartments In 2015, Study Reports
Tempe was one of 14 US cities catering heavily to renters with deep pockets in 2015, according to a recent study by RENTCafé. All six of the city's large rental projects completed last year were high-end rentals.
By comparison, 77% of new West Coast apartments are considered upscale, while nationally, 75% of all large multifamily rental developments are high-end. Phoenix saw the third most spectacular increase in high-end rental construction volume in the nation, with a leap of 800% from 2012 to 2015.
The study concludes the increase in construction is a direct reflection of demand for luxury apartments by renters-by-choice: those who are capable of buying but who choose to rent instead. This demographic is comprised of empty-nest retirees and Millennial lifestyle renters. A surge in construction of high-end apartments is by no means an overreaction to this demand, as Yardi Matrix is reporting the average occupancy rate in such properties was 95.8% at the end of 2015.
Even though developers are paying attention to high-income renters, economic forces will eventually drive the rents of older apartments down and will provide for more affordable options as well. The entry of new projects makes the older units less desirable and thus more affordable, the Wall Street Journal reported.
These rentals are characterized as “high-end” by their top-quality interior finishes, high-end appliances, detailed building architecture, designer landscaping and coveted locations. They offer a resort lifestyle in the form of first-class fitness centers, concierge services and socializing opportunities.